Insights for indie game developers: Venture capitalist Gaurav Ranjan shares key advice

Gaurav Ranjan from Prime Venture Partners
Gaurav Ranjan

“There’s no better time than today to build games in India,” Gaurav Ranjan told AnimationXpress.

At Gamescom Asia, AnimationXpress had the opportunity to interact with Ranjan, who is the vice president of Prime Venture Partners – an early-stage VC fund actively investing in game developers and diverse sectors.

In our conversation, Ranjan shared insights on VC perspectives, the criteria for evaluating game developers, investment strategies, and the evolving landscape of game development and funding in India.

India – A promising mobile gaming market

In India, mobile gaming has more users than PC and console gaming. Due to cheap data services and an increasing usage of cellular devices, the mobile gaming market can be exploited, Ranjan explained.

“We have the talent which can build mobile games that can compete with high-quality games like Clash of Clans and Clash Royale,” he said. “There is a large user base which is willing to pay. Systems like UPI and micro transactions have made payments easier than before. Today, you can build games which can be monetised in India as well as globally.”

The metrics to measure a game’s success

Ranjan shared two important metrics that investors look at:

  • LTV (lifetime value) to CAC (customer acquisition costs): Ideally, one would want the lifetime value of a user to be at least two to three times your CAC, he said. So if a studio spends US$1 to acquire a user onto its game, the studio should be able to make at least US$3 off them. “User acquisition is where a lot of studios and games need to crack the code,” Ranjan said.
  • D1, D7, D30 Retention: If a studio acquires 100 users on its game, this metric looks at the number of users still active at the end of the first day (D1), at the end of the week (D7) and at the end of the month (D30). “You’d be surprised to know that for casual games, D1 retention is less than 30 per cent and D30 is less than 10 per cent,” Ranjan revealed. So if you take 100 users as the number, less than 30 users will be playing your game at the end of the first day, and less than 10 users will be playing at the end of the month.

Acquisition pathway: A potential route for indie game developers’ success

If you are an indie developer with a small team building a game, and don’t know how to scale and monetise it, there is still a way to earn by leveraging new business models. “There are large companies which can acquire a minority, majority or complete stake in the game you have built. Such companies open up the market for indie developers. So even if you are a small developer, you can build a good game and have a good exit or good outcome for yourself,” Ranjan explained.

Clash of Clans (Photo: facebook./ClashofClans)

Monetising games

There are two ways one can monetise mobile games:

  • Ads
    As per FICCI-EY Report 2023, InMobi’s platform data showed that 34 per cent of all ad spends were on game apps between January and July 2022, and there has been a 60 per cent year-on-year growth in the volume of advertisers investing in mobile game advertising.
  • IAP (in-app purchases)
    In India IAP was very low but with the advent of BGMI (PUBG elsewhere) and Free Fire, IAP has gone through the roof because people are paying within the game to buy in-game assets, Ranjan said. According to surveys, Indian users are spending around 250 million annually on IAPs for games including PUBG and Free Fire. As online gamers are maturing and moving beyond casual gaming habits to serious gameplay, it is resulting in higher in-app purchases, the FICCI-EY report has stated. “So there are a lot of monetisation opportunities through IAPs. You can monetise by building good games where users pay to buy assets within the game.”

If I’m a gaming studio that is looking to develop games fully in India, what should be my first step?

“Your first step should be to identify a game genre that you’re confident about building – it could be a puzzle game, a match three game, a strategy game, or a shooter game. Identify that, then build your game and launch it,” Ranjan stated.

Qualities Prime Venture Partners looks for in game developers

Here’s how Prime Venture Partners evaluates gaming studios or game developers:

  • Team: “The game developers’ team plays the biggest role. It needs to have a deep understanding of building and running games,” said Ranjan. By that Ranjan means that the team needs to have experience in not just building games but also scaling them, should understand the game dynamics and the game economics. They also evaluate the game designs and how levels are designed within the games, how the team runs live ops within the games, etc.
  • Users: The team must have a good understanding of their users and how to target them.
  • Model: A studio must define the kind of game/games it wants to build. “Are you building a studio model wherein you launch 10-15 games out of which maybe one or two will be successful, or are you building a mid-core gaming studio where you take time to build one game and launch it,” Ranjan highlighted. If these specifics are not defined, it is hard for VCs to take a chance unless the genre of the game is either very interesting or evergreen, he said.

Prime Venture Partners’ investment process

“We are sector agnostic but gaming is a big focus area for us,” Ranjan shared. “We come in at the seed stage. At this stage, we provide capital or equity funding to startups, help them build and scale the game and the business.”

While the company does not get involved in the creative or the game design process, it does take part in the strategic decision making. “Unlike game publishers, we come at an early stage. We take decisions like – should you target the Indian or the global market, should you monetise by ads or by IAPs, should you focus on hyper casual games, midcore or casual midcore games,” he said.

Hitwicket (Photo: facebook/hitwicketgame)

A successful investment case study

Hyderabad-based cricket strategy game Hitwicket is a successful case study of Prime Venture Partners. “Hitwicket’s metrics in terms of data, retention, ARPU (average revenue per user) and the player conversion is at par, if not better than the best games out there in the world,” Ranjan revealed.

A message for indie developers

“Look for the right genre,” Ranjan stated. “A lot of times, people build games of the genre that is hyped. But if you don’t have a great game or a great player experience, people will fall out. Focus on building high-quality, deep engaging games. But there’s no better time than today to be an indie developer in India.”


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